The reference base of an index series is that period for which the value of the index is set to 100.0. With the introduction of the 2006 edition of ANZSIC, all indexes are now presented on a reference base of 2008-09. Since the September quarter 2004, the LPI has used a reference base of 2003-04 = 100.0. Prior to this time the reference base for the wage price indexes was September quarter 1997. This was the first quarter for which data was available.

CONVERTING A SERIES TO THE NEW REFERENCE BASE

The conversion of series from the old base to the new base involves a rescaling of the index numbers. The conversion factor that should be applied to the index numbers is calculated by obtaining the ratio of the index numbers on the old and new bases for the new reference period.

The conversion factor is calculated using the unrounded index number for the 2008-09 financial year. The calculation of financial year indexes is outlined in paragraph 35 of the Explanatory Notes.

For example, for the total hourly rates of pay excluding bonuses index for Australia, an arithmetic conversion factor is obtained as follows:

The factor may be multiplied by any total hourly rates of pay excluding bonuses index number for Australia on the old reference base to give the corresponding number on the new reference base. The procedure shown in the above example may be followed in respect of any specific index series for which index numbers have been published on the old reference base, with the exception of industry index series. It is not appropriate to convert the ANZSIC 1993 industry series on the 2003-04 reference base in previous issues to the 2008-09 reference base using this method.

ROUNDING

Index numbers and percentage changes are always published to one decimal place, with the percentage changes being calculated from the rounded index numbers. Index numbers for periods longer than a single quarter (e.g. for financial years) are calculated as the simple arithmetic average of the relevant rounded quarterly index numbers. The conversion factor described above is applied to the rounded index numbers.

A consequence of re-referencing price indexes can be that period to period percentage changes calculated using re-referenced index number series may differ slightly from those calculated using the original series. These differences do not constitute a revision of the index but simply reflect the effect of rounding.

CONVERTING THE RE-REFERENCED SERIES BACK TO THE PREVIOUS BASE

The conversion of series from the new base to the old base also involves a rescaling of the index numbers. The rescaling factor is obtained by taking the inverse of the previously described scaling factor.

For example, for the total hourly rates of pay excluding bonuses index for Australia, the rescaling factor is obtained as follows:

The factor may be multiplied by any total hourly rates of pay excluding bonuses index number for Australia on the new reference base to give the corresponding number on the old reference base. As mentioned above, the industry price index series in previous issues should not be converted due to the use of two different industry classifications.

Conversion factors for most of the published total hourly rates of pay excluding bonuses indexes are provided in table A2. Additional factors can be obtained using the formulas above or by contacting Kathryn Parlor on Perth (08) 9360 5151.

CONVERSION FACTORS

A2 FACTORS USED TO CONVERT INDEX NUMBERS, from old reference base (2003-04 financial year = 100.0) - to new reference base (2008-09 financial year = 100.0)

Private

Public

All sectors

Australia

0.8242

0.8122

0.8212

Sector by State/Territory

New South Wales

0.8349

0.8119

0.8292

Victoria

0.8294

0.8259

0.8285

Queensland

0.8155

0.8055

0.8128

South Australia

0.8294

0.8071

0.8234

Western Australia

0.7842

0.8013

0.7880

Tasmania

0.8236

0.8021

0.8165

Northern Territory

0.8120

0.8300

0.8195

Australian Capital Territory

0.8302

0.8105

0.8173

Sector by Industry(a)

Mining

0.7720

. .

0.7720

Manufacturing

0.8263

. .

0.8248

Electricity, gas, water and waste services

0.8073

0.7940

0.7988

Construction

0.7885

. .

0.7895

Wholesale trade

0.8328

. .

0.8328

Retail trade

0.8395

. .

0.8393

Accommodation and food services

0.8660

. .

0.8660

Transport, postal and warehousing

0.8270

. .

0.8255

Information media and telecommunications

0.8493

. .

0.8455

Financial and insurance services

0.8213

. .

0.8195

Rental, hiring and real estate services

0.8393

. .

0.8358

Professional, scientific and technical services

0.8058

0.8180

0.8068

Administrative and support services

0.8395

. .

0.8395

Public administration and safety

0.8303

0.8110

0.8118

Education and training

0.8030

0.8043

0.8045

Health care and social assistance

0.8208

0.8200

0.8203

Arts and recreation services

0.8353

. .

0.8358

Other services

0.8365

. .

0.8365

. . not applicable

(a) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (cat. no. 1292.0)